Samsung paid Microsoft $1 billion a year for Android patents

In September 2011, the two companies entered a seven-year cross-licensing agreement for mobile-related patents. The payments for the first year were made without fuss. In August 2013, Samsung told Microsoft that it had assessed the value of the royalties owed for the second year as over $1 billion. Payment of this fee was due in October, but Microsoft says that no payment was received until late November 2013. Redmond’s complaint says that Samsung owes more than $6.9 million in interest fees for the late payment (per the terms of the original licensing agreement).

What changed between August and October? In September 2013, Microsoft announced that it was buying Nokia’s Devices division. The software giant asserts that Samsung is both claiming that Nokia’s devices are not covered by the cross-licensing deal – and hence violating Samsung’s own patents – and that the Nokia purchase voids the licensing agreement in its entirety.

Only in bizarro-idiotic-upside-down world can you not contribute a single line of code to a product and yet still get $1 billion a year simply by sitting on your ass.

Windows 8 on tablets was a colossal flop and Windows Phone barely gets by, and this is how Microsoft pads the numbers in mobile. Classy.

No one’s saying that you have to be sorry for either party. The point is that this isn’t a zero-sum game – rather, the costs of this idiotic state of affairs are passed onto you and I, and every other consumer of these companies’ products.

Forget waiting for the corporate monoliths to call for an end to software patents (even though there seems to be some momementum now to at least limit their scope) – _we_ need to be calling for their end, and educating the rest of our fellow consumers as to why this battle, in particular, is worth fighting.

That Microsoft is able to bilk gullible companies into paying what amounts to an extortion fee for licensing rights on code that it never developed nor contributed a single line of code is outrageous. Microsoft has nothing to do with Linux and any claims it makes regarding its intellectual property in Linux or Android are patently absurd.

Funny how every criticism of Google gets downvoted by the Google brigade: Google fanboys are worse than the Apple worshippers.

I would have downvoted your post for trolling too, it brought no value to this discussion and served only to stir up the hive. And I’m not even a google fanboy. Go ahead and criticize google, but please at least post something coherent and relevant.

My post is very coherent and relevant: Android is central in Google’s spyware strategy and Google has perverted the open source philosophy. NSA’s strategy is exactly the same btw

It’s high time to move on.

It’s not your opinion that’s objectionable. It’s just when you make an entrance immediately with guns blazing and attacking google (who aren’t even in this article, dontcha know!), that makes it blatantly clear that you’ve got an axe to grind. If you wanted a meaningful dialog, which I doubt, then you should work on making your opening more relevant and insightful. Anyways, that’s all I have to say since there’s nothing interesting enough here worth talking about.

it’s very perverse that the “open source” community of progressive europeans has been forced into selling their entire life to google Inc., the american data mining and advertising mega-company masquerading as a progressive entity but could perhaps be more morally devoid than the old guard PC companies such as Microsoft, Apple, IBM and Samsung.

google buying android was the worst thing to ever happen to android. becoming an advertiser-supported apple knockoff is never a comfortable place to be. you are selling all of yourself to compete with something you claim is pointless fluff.

apple users enjoy their pointless fluff in private because they pay for it. nothing is free in the tech world. government spying aside, i think it’s creepy to knowingly sell yourself to advertisers to save a couple pennies.

Dude, what are you talking about? Linux _is_ the linux kernel. Anything that is running on top of the linux kernel _is_ linux (at least an instance of it). Perhaps you mean it’s not _gnu/linux_. But saying that android is not linux but has a linux kernel is like saying that an Airbus is not a jet but it has a jet engine.

Samsung got $1.2 billion in partner payments in 2013, other vendors get these partner payments too. It looks like a net payment to the vendors is the result of this cross-licensing scheme, especially if their sales of Android devices are low — some that don’t even offer Android devices make patent deals with Msft too.

Eric Schmidt has said that Google doesn’t object to Android makers entering into these kinds of deals. Perhaps he doesn’t see it as a negative.

It’s funny that some people seem to think Microsoft (or any other company for that matter) obtained their patent portfolio out of thin air, that no cost or investment was involved, that no return-on-investment should be expected or justified, and that they sit there raking in piles of cash for `doing nothing`. The laughs continue when people claim due royalties amount to nothing more than `extortion`.

The patent system is shameful but so are some of the perverted views people hold.

It’s funny that some people seem to think Microsoft (or any other company for that matter) obtained their patent portfolio out of thin air, that no cost or investment was involved, that no return-on-investment should be expected or justified, and that they sit there raking in piles of cash for `doing nothing`.

The point isn’t how much it costs microsoft, I’m positive that it costs them a fortune to build & maintain their portfolio. But so what? It makes it no less extortion when MS pulls up to defendants demanding royalties over 3rd party software that MS had no hand in developing. It’s not at all like MS materially contributed to these projects and now deserves some kind of compensation for it’s efforts. It might be a different story if microsoft’s code made it’s way into 3rd party software or funded the engineers, but that’s generally not what happens.

The defendants of patent lawsuits typically spent their own money & resources to develop their own implementations, usually without any help from the patent holder. The reality is that the patent system can deprive such defendants from the fruits of their own work.

Edit: In a situation where a developer says “instead of spending a fortune to develop and maintain an implementation ourselves, we’d rather license your technology and pay you royalties”, then that is perfectly acceptable. IMHO, this is what we should be moving towards instead of patent monopolies.

The patent system is shameful but so are some of the perverted views people hold.

The point isn’t how much it costs microsoft, I’m positive that it costs them a fortune to build & maintain their portfolio. But so what? It makes it no less extortion when MS pulls up to defendants demanding royalties over 3rd party software that MS had no hand in developing. It’s not at all like MS materially contributed to these projects and now deserves some kind of compensation for it’s efforts.

Collecting due royalties isn’t magically turned into extortion simply because you don’t like the company collecting those due royalties, or you don’t think they should have any right to them. Whether or not MS `materially contributed` has absolutely nothing to do with anything. We are talking about rights and usage licensing. What matters is who owns those rights, that’s it.

It might be a different story if microsoft’s code made it’s way into 3rd party software or funded the engineers, but that’s generally not what happens.

No, it wouldn’t be a different story if that were the case for the very reason I just pointed out above. The only person(s) entitled to royalties are those who maintain ownership.

Software programmers, for example, are akin to studio musicians. A company employs you as a work-for-hire. By entering that agreement, you are transferring your rights to the employer. If that employer wants to then sell those rights to someone else, they have a legal right to do so. And that someone else has every right to collect royalties regardless of the fact they had no role in the original creation of the works.

The defendants of patent lawsuits typically spent their own money & resources to develop their own implementations, usually without any help from the patent holder. The reality is that the patent system can deprive such defendants from the fruits of their own work.

Again, the relevant component here is who maintains ownership of the rights. If individual developers don’t like how this works, they should not enter into agreements where they don’t maintain ownership over works they create. You could argue that these people are abusing themselves more than company X is abusing the patent system as they are the root cause of themselves not having any rights.

Edit: In a situation where a developer says “instead of spending a fortune to develop and maintain an implementation ourselves, we’d rather license your technology and pay you royalties”, then that is perfectly acceptable. IMHO, this is what we should be moving towards instead of patent monopolies.

That’s exactly what happens when you enter into a licensing agreement. Further, you can’t be a victim of extortion when you’re a willing participant in the agreement.

The patent system is shameful but so are some of the perverted views people hold.

What view exactly do you find perverted?

The view that the original creators of works are entitled to any rights or royalties after they have sold or forfeited their rights. The view that people who accept works-for-hire/contracted projects are entitled to anything outside the terms of the agreement, and that those paying for the works-for-hire/contact don’t deserve ownership.

Whether or not MS `materially contributed` has absolutely nothing to do with anything. We are talking about rights and usage licensing. What matters is who owns those rights, that’s it.

That’s exactly the problem though, nobody should own rights to projects they haven’t contributed to. I can do all the software development, and yet patents grant other outsiders rights to my work. This is ethically wrong.

Again, the relevant component here is who maintains ownership of the rights. If individual developers don’t like how this works, they should not enter into agreements where they don’t maintain ownership over works they create.

I don’t have any problems with “agreements”. The problem is with legal policy granting one party control & royalties over implementations developed by another party, aka patent monopolies.

The view that the original creators of works are entitled to any rights or royalties after they have sold or forfeited their rights. The view that people who accept works-for-hire/contracted projects are entitled to anything outside the terms of the agreement, and that those paying for the works-for-hire/contact don’t deserve ownership.

Hmm, we must be cross-talking somehow because I was talking about patents. I’m failing to connect the dots as to how you got to individuals forfeiting rights/work-for-hire/etc?

That’s exactly the problem though, nobody should own rights to projects they haven’t contributed to. I can do all the software development, and yet patents grant other outsiders rights to my work. This is ethically wrong.

At the risk of being too vague, an original creator of something should have the ability to sell, if they so choose, his/her ownership/rights of that creation to an entity who made no contribution. You should not be allowed any rights if your creation is simply your own variation/implementation of a work already under patent/copyright. If your work is completely original and produces an original result, you should be entitled to ownership.

I don’t have any problems with “agreements”. The problem is with legal policy granting one party control & royalties over implementations developed by another party, aka patent monopolies.

Some people are ignoring the agreement factor and focusing solely on whether or not someone who is not the original author is collecting royalties. Sorry if I’ve lumped you in with that bunch.

Hmm, we must be cross-talking somehow because I was talking about patents. I’m failing to connect the dots as to how you got to individuals forfeiting rights/work-for-hire/etc?

When it comes to ownership and rights, patents, copyrights, and trademarks have some things in common. I thought it might help to discuss things in a more broad sense but that may have been a misjudgment on my part. I suppose I could skip all of that and say simply that I disagree with anyone who thinks Microsoft is somehow criminal for operating within the bounds of law, and that I don’t believe them to be any `worse` for buying patents than those who sell them. Both parties are equal participants so if one is `evil` then both should be regarded that way. Sometimes it’s hard to tell if someone actually cares about the subject matter or is just trash talking because Microsoft (or Apple, or Samsung, or whoever else) is involved in the discussion.

The US patent system itself is crippling in its current form. I don’t think eliminating it completely is a good alternative but most of us would probably agree significant reform at a minimum would be a step forward.

I suppose I could skip all of that and say simply that I disagree with anyone who thinks Microsoft is somehow criminal for operating within the bounds of law, and that I don’t believe them to be any `worse` for buying patents than those who sell them.

The thing is, it isn’t buying/selling patents that’s the problem. It doesn’t matter where patents come from, the harm stems from what happens when patents are enforced against parties who developed their own software independently using their own resources. They put tons of work to build their products and bring them to market, why should anyone else be entitled to the profits? These guys just show up with lawyers one day to collect money even though they’ve never contributed a single line of code.

Sometimes it’s hard to tell if someone actually cares about the subject matter or is just trash talking because Microsoft (or Apple, or Samsung, or whoever else) is involved in the discussion.

Very true. However I’m pretty consistent with my view against software patents regardless of the companies involved. For example, while it won’t surprise you that I’m against MS for it’s membership in the patent trolling Rockstar Consortium, I am actually for MS in cases involving software patent suits against it.

Who cares how they obtained it, if that garbage is used for extortion that you mentioned. MS abuses the broken law which allows such parasites to profit from innovation which they they didn’t contribute anything to.

So what you’re basically saying is you simply don’t understand how ownership of copyrights, trademarks, and patents works. Here’s something to chew on… The only thing that has any relevance is under what terms the original work was created. Being a `hands-on contributor` means absolutely nothing if you agreed to transfer your rights/ownership to someone else. In such cases you’re entitled to nothing and deserve nothing beyond the terms of your agreement.

I’m saying what I’m saying – MS are parasites who profit from others’ innovation. And what enables them to do it is a broken patent law.

No. What enables Microsoft rights to works they aren’t the original creators of is the original creators willfully selling those rights. You should despise the seller as much as the buyer. The seller is after-all the root source of ownership.

As far as Microsoft being mere `parasites`, … As silly as that may be, people have the right to hold that opinion. Having an opinion doesn’t require the person be well-informed.

“What enables Microsoft rights to works they aren’t the original creators of is the original creators willfully selling those rights.”

Who sold what rights? You’re not making any sense.

Whoever sold patents to Microsoft. If the previous owner is not the original creator of the work, then whoever sold it to that entity… And all the way back to the original creator. People are whining about Microsoft collecting royalties on patents they own but without being the original creator/inventor. It’s not possible for Microsoft to own a patent or rights to anything they didn’t originally create if the original creator(s) didn’t sell their rights in the first place. This isn’t rocket science.

No, in most cases those “authors” didn’t author anything. They took existing trivial ideas and turned them into patents. And MS uses such pile of garbage to extort money. With latest developments hopefully that pile will be greatly reduced, as well as ability of MS to shake down competition.

I wouldn’t say Windows 8 on tablets was a colossal flop, they just didn’t become the next big thing in computing MS hoped.

Pen-based Windows tablets have been important in niche markets for a long time. I am also seeing a lot more of them being used as laptop replacements, especially with keyboard cases.

Windows Phone has been a flop but I find Windows tablets far more USEFUL for work than an iPad which is basically a consumer content consumption device. What I want is an OSX tablet or native Linux w/ 3D support for my Thinkpad Tablet 2.